California vs out-of-state

[Jonathan M.]

Hi all,

I've been an active follower of this forum for quite some time. I have a pretty simple question -- at this time, would you invest in a $400k condo in Walnut Creek, CA or a 2-4 plex in Austin, Texas? 

It's the ongoing debate on appreciation vs cash flow. I don't really prefer one or the other so just looking for general advice on markets and what ya'll would do? 

Cheers,

Jonathan

[Arlen Chou]

@Jonathan M. on the units I have done no improvements on, I am flowing about $100/door/month.  On the units I have renovated I am flowing over $1000 a door/month. to be clear these are NET numbers.  

But remember that cash flow is an illusion based around the amount you put in as an investment.  ANY property will technically cash flow if you pay all cash.  The great driver of wealth in real estate is appreciation.  In the past 5 years, I have been able to go from zero properties to 19 doors AND my total money in ALL of the deals at this point is $700k.  I am in the process of pulling that last bit out over the next few months.  That will leave me with an infinite ROI on all of my doors. That is the power of appreciation. 

I am totally open to meeting up and grabbing a bite, just send me a PM.